29th Mar 2023

Finnish minister pours cold water on fiscal treaty

  • (Photo: European Community)

Finland should not sign up to the EU's new fiscal treaty, which is a "at best unnecessary and at worst harmful," Finnish foreign minister Erkki Tuomioja has said.

Criticising the EU for its "terrible hurry" to sign and adopt the new rules and for circumventing "all the normal parliamentary procedures," Tuomioja wrote in his blog on Monday (16 January) that the treaty will overlap with existing EU laws on economic discipline - the so-called 'six-pack.'

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The new treaty will "just confuse decision-makers, undermine the EU commission's role and create new divisions within the EU" he said.

"The whole contract is at best unnecessary and at worst harmful, and Finland has reason to oppose the whole treaty and at least remain outside it."

One of the measures to be applied by the new treaty - a "structural deficit" of 0.5 percent of GDP - would be a "completely nonsensical straitjacket" that would only deepen recession and increase unemployment, he added.

In his opinion, the whole agreement is a concession made to Germany so that the EU's paymaster lets the European Central Bank intervene more forcefully to stem sovereign debt problems from spreading to more euro-countries.

"We should not be taking orders from anybody," Tuomioja said.

The minister's Social Democratic party is a junior member in Finland's ruling coalition and his views do not reflect the position of the whole government.

The chair of the Finnish parliament's finance committee, Kimmo Sasi last week indicated Finland is ready to sign the treaty.

Meanwhile, Finnish voters are growing increasingly eurosceptic.

The far-right and anti-euro True Finns party won nearly a fifth of parliamentary seats in elections last April. Reflecting the national mood, the new government has already put extra conditions on the second Greek bail-out and raised heckles over expansion of EU passport-free travel to Bulgaria and Romania.

Finnish presidential elections on Sunday feature eurosceptic candidate Sauli Niinisto as a front-runner.

After last Friday's downgrade by US ratings agency Standard & Poor's of nine EU countries, Finland remains one of the only four triple-A rated economies which backs up the euro bail-out fund, the EFSF.

The fund itself lost its S&P triple-A rating on Monday, raising the spectre of higher bail-out borrowing costs, amid market concerns over EU political disunity.

One expert has warned that if any euro-using country, such as Finland, does not sign the fiscal compact, it would see its borrowing costs soar and could ultimately be excluded from the single currency.

"Even if this provision is not included it should become politically untenable for a non signatory of the inter-governmental agreement to stay in the euro," Peter Sutherland, a former EU competition commissioner and the head of the European Policy Centre, a Brussels-based think tank said on Monday.

Finland on Greek collateral: 'It's not about the money'

Finnish minister Alexander Stubb has said his country's demand for Greek collateral is meant to defend the eurozone principle of financial responsibility. But he admitted that Finnish eurosceptics have played their part in the initiative.

EU approves 2035 phaseout of polluting cars and vans

The agreement will ban the sale of carbon-emitting cars after 2035. The EU Commission will present a proposal for e-fuels after pressure from German negotiators via a delegated act, which can still be rejected by the EU Parliament.


Dear EU, the science is clear: burning wood for energy is bad

The EU and the bioenergy industry claim trees cut for energy will regrow, eventually removing extra CO2 from the atmosphere. But regrowth is not certain, and takes time, decades or longer. In the meantime, burning wood makes climate change worse.


EU's new critical raw materials act could be a recipe for conflict

Solar panels, wind-turbines, electric vehicle batteries and other green technologies require minerals including aluminium, cobalt and lithium — which are mined in some of the most conflict-riven nations on earth, such as the Democratic Republic of Congo, Guinea, and Kazakhstan.

Latest News

  1. EU approves 2035 phaseout of polluting cars and vans
  2. New measures to shield the EU against money laundering
  3. What does China really want? Perhaps we could try asking
  4. Dear EU, the science is clear: burning wood for energy is bad
  5. Biden's 'democracy summit' poses questions for EU identity
  6. Finnish elections and Hungary's Nato vote in focus This WEEK
  7. EU's new critical raw materials act could be a recipe for conflict
  8. Okay, alright, AI might be useful after all

Stakeholders' Highlights

  1. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  2. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  3. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  4. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  5. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality
  6. Promote UkraineInvitation to the National Demonstration in solidarity with Ukraine on 25.02.2023

Join EUobserver

Support quality EU news

Join us